Wednesday, May 7, 2014

Minors Over 10 Years Can Operate Bank Accounts: RBI

Minors Over 10 Years Can Operate Bank Accounts: RBI



New Delhi:

Minors above 10 years of age can open and operate independently savings bank account and use other facilities like ATM and cheque books.

The Reserve Bank on Tuesday issued the guidelines allowing minors to operate bank accounts independently with a view to promote financial inclusion and bring uniformity in opening of such accounts in banks.

RBI had earlier permitted minors to open fixed and savings deposit bank account with mothers as guardian.

Modifying the guidelines, the RBI said that all minors can now open a savings/fixed/recurring bank deposit account through either his/her natural guardian or legally appointed guardian.

The minors who have attained 10 years of age, would be allowed to open and operate savings bank accounts independently.

"Banks may, however, keeping in view their risk management systems, fix limits in terms of age and amount up to which minors may be allowed to operate the deposit accounts independently," the RBI said.

Further, the banks can also decide on the minimum documents which are required for opening of accounts by minors.

"Banks are free to offer additional banking facilities like Internet banking, ATM/debit card, cheque book facility, etc, subject to the safeguards that minor accounts are not allowed to be overdrawn and that these always remain in credit," the RBI said.

On attaining majority, the minor would be required to confirm the balance in his/her account.

If the account was operated by the natural/legal guardian, fresh operating instructions and specimen signature of the minor should be obtained and kept on record for all operational purposes, the RBI said.

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Friday, April 25, 2014

weekly gold

Gold remains the safety bid that people flock to in troubled times!  The turbulence between Russia and the Ukraine was just enough to propel Gold out of the downtrend.  It may have initially been short-covering but may turn into a real bull run if the Ukraine situation escalates.  The Russian/Ukraine situation has escalated in Donetsk with potential conflict possible which is supportive of the Gold market. Pro-Russian activists have kept the tensions front and center.   The Ukraine government responded sending troops to Kharkiv when the activists started to take over buildings in the eastern portion of the Ukraine.   Russia cautioned the Ukraine that any possible violence could escalate into  a civil war.   China and Japan had been main buyers of US Treasuries and the US Dollar as debt instruments.  Recently, they have whittled down their US assets and have been accumulating Gold.  Banks in China actually developed Gold Accumulation Plans with support of the World Gold Council so that investors could eventually take delivery if they so desired.  The banks have about 17,125 branch offices with the GAP introduced to help the people build their wealth.  They do keep their physical products separate from the paper assets.  Projections from the World Gold Council have the Gold demand increasing in China 25 % over the next four years.  The population alone may more than double creating further demand without external factors.  India had been the number one buyer of Gold until 2013 when China overtook them.  2013 was a robust buying year in Gold by the Chinese, but it is thought that 2014 may be more of a consolidation year.  China may hold about 2.716 tons of Gold while the US may hold 8.812 tons.  China, in previous years, had suffered the effects of hyperinflation leading many to hedge for future events.  They believe that the US economic policies will someday destroy the dollar which would propel the Gold to new highs.  China may have their own predicament with a potential credit crisis for which the Gold may also be of use.  It had been used for gift giving for the Chinese Lunar New Year or Spring Festival and more recently Valentine's Day and Mother's day.   Only the pure Gold would be considered investment grade.  The demand for Gold in India may increase as a key festival is on tap.  Wedding season may warrant a relaxation of the import taxes which remain at about 10 % which further constraints.  Turkey's central bank had decreased their Gold reserves by 1.2 metric tons and 7.3 metric tons recently.   Central banks are still net buyers of the Gold with holdings increasing 6.3 million ounces last year.  The banks are projected to buy 5.4 million ounces in 2014.  The industrial demand for Gold has reached about 92.0 million ounces in 2013.  Investment demand had decreased to 30.9 million ounces in 2013.  The Central Bank of Iraq had acquired 36 metric tons of Gold in March.  Chinese buyers purchased about 125 tons of Gold in February.  Mexico had increased their holdings by 78.5 tons of Gold in March.    Supplies of Gold above ground are estimated to be about 177,200 tons according to the World Gold Council.  Gold remains as one of the most liquid assets that has rallied in the face of the worst calamities in our history books.  Yet without the fear and anxiety we may see a lower range for Gold.   The CME Group has plans for a Gold contract at the Shanghai Gold Exchange.  This would be a lease agreement for a physically settled contract.  

More sanctions to come from the G7 to Russia!  The sanctions may be the only way to avoid a military confrontation, yet going back into the provocation that may have contributed to "Pearl Harbor" we must walk a fine line of diplomacy.   The wall of worry is expanding and the sanctions while punishing Russia are affecting the markets globally.  The Standard & Poor's credit rating agency downgraded Russia's credit rating today.  The Russian central bank had then increased a key interest rate.  Visa and MasterCard stand to lose a great deal with the sanctions imposed as hundreds of millions of cards are held in Russia. The Russian President countered with ideas to begin Russian self-contained credit payment systems.   The old adage "sell in May and go away" may somehow come to fruition this year due to totally unrelated events that may support the cliché.  If the equities sell off, the Gold should acquire the allocations among a few other hard assets.  The US and Russia have danced around potential conflicts in the past without any military use.  Each knows that the end result may just result in the end.  It must be determined if Kiev may have illegally entered into the turmoil.  The agreement signed in Geneva last week by the US, Russia, the European Union and Ukraine was to disarm the rebels.  Russia stands by their right to protect Russian citizens according to the Geneva agreement.  No one wants a military resolution, so the US and allied countries are attempting to increase the sanctions against Russia.  Russia is already suffering with a weak Ruble and some lackluster data.   Any further bloodshed may cause the conflict to escalate.  Diplomacy is vital among the leaders of these nations to look for an accord for the benefit of life as we know it.   The global marketplace still has fragility as Japan's flip from trade surplus to a deficit  of about 1.446 trillion Yen in March exceeded expectations of 1.070 trillion Yen.  It would not be a surprise for Japan to use additional tools to support their economy.   Still the Yen has been used as a safe-haven in light of the Ukraine situation.  It is a wait and see situation to monitor if the potential conflict in the Ukraine could possibly erupt into more.  The powers have strong backing in allies, both the US and Russia, so any further gas on the fire could ignite a conflict that no one wants to imagine.   The Russian borders and Crimea have been close with many of its people Russian born.   The vote was in favor of Crimea to secede and ask the Russian Federation for Membership.  Crimea had belonged to Russia back in the 1954 until Nikita Khrushchev had given the Black Sea region to the Ukraine.  Russian President Putin defends his right to send troops to the Ukraine on behalf of the Russian citizens residing there.  He actually stayed within the treaty limit of 25,000 troops initially, but it was reported that about 40,000 troops and even more perhaps remain around the Ukraine border.   The Ukraine is seeking financial aid from the IMF of up to about $18 billion to help the country out of the debt.  Russia is experiencing the punishing effects of the sanctions as the sovereign wealth funds had outflows.  Global leaders still regard Russia's action as grabbing a country for benefits perhaps derived from the resources of the region.   World leaders are intent on watching Putin to be sure his "annexing" stops at Crimea!   British Prime Minister David Cameron regarded this action as a breach of international law.  Sanctions may be imposed on Russia still yet regarding this action such as travel bans and financial sanctions.  About $5.5 billion of outflows have already transpired this year in Russia in light of the sanctions.   US sanctions have already stopped the Visa and MasterCard services at the Bank Rossiya in St. Petersburg.  Sanctions on parties in Putin's inner circle have been targeted.  The sanctions have already had an impact on Russia as Fitch's credit rating agency has cut the outlook to BBB negative.  Loans have been called in and gold reserves have fallen to $493.2 billion as of March 14th.   The G-8 said that they will suspend the G-8 Summit in Sochi this year.  The Organization for Economic Cooperation and Development has spoken of revoking Russia's entrance into the organization.  Asset blockades, financial and trade sanctions have all been suggested.  Putin may pay about $3 billion ++ costs to annex Crimea.  The problem seems to be a history of violating international boundaries for the Russian President.  Putin retorts that the US and NATO have come close to the Russian borders.  The currencies have become extremely volatile especially for the ruble and the hryvnia.   Russia is also set on building the relationship with China.  China has been one of the only countries holding loyalty to Russia and not condemn the country for the Crimea situation.  China is a superpower that will matter and Russia wants to use that strength.   Russia and the US had fought on the same side during WWI and WWII yet tensions still run very deep.  US Secretary John Kerry and European Union foreign policy chief Catherine Ashton met in Geneva to discuss a disarmament in the Ukraine of all illegal armed groups.   US Vice President Biden warns Russia that time is short for action to dissolve any potential conflict.  Pro-Russian militia occupying areas in the eastern Ukraine do not consider to be part of any deals reached by the US, Russia, Ukraine or EU.     Russian troops seized the Crimean port of Sevastopol raising their flag.   Russia's take-over of Crimea will perhaps consist of pension adjustments up to the Russian pensions, raises, infrastructure upgrades such as quite possibly a bridge and a tunnel.  The EU may proceed to lighten imports of natural gas from Russia.  The Euro Zone and the world would feel the pressure of the sanctions as many global workers are employed by Russian companies.   Russia and the US both have an accord on nuclear terrorism threats realizing that international cooperation is necessary to provide a stronger front. 

Today's PMI Services Flash for April is 54.2 while the previous reading was 55.5.  Consumer Sentiment for April was at 84.1 while the previous reading had been 82.6.  The US Initial Jobless Claims for the week of April 19th was up 24,000 new claims for unemployment insurance to 329,000 while the previous week had 304,000.  The Continuing Claims which have a week lag time were down 61,000 to 2.680 million.  Durable Goods New Orders for March were 2.6 % while the previous reading was 2.2 %.  The Durable Goods excluding transportation were 2.0 % while the previous reading was 0.2 %.  The Kansas City Fed Manufacturing Index for April was 7 while the previous reading was 10.  The Bloomberg Consumer Comfort Index for April was -25.4 while the previous reading was -29.1.  The PMI Manufacturing Index Flash for April was 55.4 while the previous reading was 55.5.  New Home Sales for March came in rather lackluster perhaps due to inventory shortages at 384,000 while the previous reading had been 440,000.  The MBA Purchase Applications for the week of April 18th Composite was -3.3 % while the previous reading was 4.3 %.  The Purchase Index was -3.0 % while the previous reading was 1.0 %.  The Refinance Index was -4.0 % while the previous reading was 7.0 %.  The ICSC-Goldman Store Sales for the week of April 19th was 0.4 % while the previous reading was -0.3 %.  Redbook Store Sales for the week of April 19th were 3.7 % while the previous reading was 2.6 %.  The FHFA House Price Index for February was 0.6 % while the previous reading had been 0.5 %.   Existing Home Sales SAAR  for March were -0.2 % or 4.59 million annual rate while the previous reading was -0.4 % or 4.600 million annual rate.  The Richmond Fed Manufacturing Index level change for April was 7 while the previous reading was -7.  The Chicago Fed National Activity Index Level for March at 0.20 while the previous level was 0.14.  This is a report to gauge the economic activity and inflationary pressure.    The Leading Indicators for March were 0.8 % while the previous reading was 0.5 %.  The last Nonfarm Payrolls for March was 192,000 while the previous reading was 175,000.  Though better than February's report, the forecast of 206,000 left some traders disappointed with the moderate number.  The Unemployment rate was left unchanged at 6.7 % while the forecasts were for 6.6 %.  The Average Hourly Earnings was 0.0 % while the previous reading had been 0.4 %.  The Average Workweek was 34.5 hours while the previous reading was 34.2 hours.  The Private Payrolls was 192,000 while the previous reading was 162,000.   Friday, we look forward to the PMI Services Flash Level for April forecast at 56.2 while the previous reading was 55.5.  Consumer Sentiment Index for April is forecast at 82.5 while the previous reading was 82.6.  Next week is huge, we have so many reports such as the GDP and the Employment report which is forecast between 203,000 and 250.000 so far.  We have the FMOC.  The country is walking a fine line of potential conflict as well.    

Gold Chart

 

 

 


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Sunday, April 13, 2014

Weekly gold

The Gold market has broken out of the bearish stance temporarily.  Gold is a wonderful safe-haven currency that may hedge against inflation and/or currency devaluation.  The currency devaluation in China potentially may trigger further reevaluations of each global currency.  In the stock valuations, it may be a matter of overvaluations that may be necessary to reign in irrational exuberance in the market.  We do have a potential perfect storm for Gold in the case that the Ukraine situation heats up.  If the Iranian Diplomat refusal ignites further conflict with Iran.  If the Stock Indices do not bottom soon.  If the US Dollar becomes more devalued.  Any of these conditions may result in a takeoff of the Gold market.  The accommodative stance of the Fed and the further out the tightening may also support the Gold market somewhat.  The more dovish the Fed, the better for Gold.  The US is constantly in the spotlight and while the US Dollar remains a premier currency, countries may dump dollars for other products that may be a stronger performer.  While all of these factors could potentially lead to a higher Gold price, none have come to fruition to the point that we would need for the Gold to takeoff, so we may experience again a range bound market in the near-term.   Central banks are still net buyers of the Gold with holdings increasing 6.3 million ounces last year.  The banks are projected to buy 5.4 million ounces in 2014.  The industrial demand for Gold has reached about 92.0 million ounces in 2013.  Investment demand had decreased to 30.9 million ounces in 2013.  The Central Bank of Iraq had acquired 36 metric tons of Gold in March.  Central banks purchased 544 tons of Gold in 2012 without the data or excluding China while in 2013 went to 369 tons.  China rarely releases data to get a view of their holdings.  Germany is currently moving Gold from New York to Frankfort in an attempt to increase their reserves while their holdings are the second largest to the US at 3,387.1 metric tons.  Mexico had increased their holdings by 78.5 tons of Gold in March.  Kazakhstan February reserves at 4.73 million troy ounces.   The US reserves 8,133.5 tons.  Holdings in the SPDR Gold Trust increased 0.6 % to 821.47 metric tons.   Supplies of Gold above ground are estimated to be about 177,200 tons according to the World Gold Council.  Gold remains as one of the most liquid assets that has rallied in the face of the worst calamities in our history books. 

The fear factor was ignited further today taking the VIX to 17.03!  The Treasuries also have benefited over the high anxiety in the marketplace taking the long-bonds up to $134^28.  The valuations of the stock do not justify the share prices.  No longer can inclement weather conditions suffice for missed targets.  Now the harsh reality sets in to reevaluate the stock prices of individual stock on merit.  Allocations may shift as portfolio adjustments are made.  There may be bargain hunting where investors may look for smaller companies with good market capitalization or just quality, making it more of a stock pickers market.  Some major companies valuations and revenue growth just were not there.  To add to the concerns, China’s imports and exports were down in March contributing further to the weakness.    Premier Li Keqiang states that more tools may be used to increase growth.  To add to the apprehension, the International Monetary Fund (IMF) Managing Director Christine Legarde retorts that rebalancing is the intention of the Chinese Yuan depreciation yet other countries such as the US have been opposed.  The Yuan was set to depreciate before widening the exchange-rate band on March 17th.   China does want their currency to become a reserve currency in the future yet the recent import/export numbers do not support a higher Yuan.  Exports decreased 6.6 % while Imports decreased 11.3 % to a trade surplus of $7.71 billion.  The devalued currency will help the country’s exports as they become cheaper to purchase.  China’s projected growth rate is set for 7.5 %.   The US already has concerns about a devalued Yuan making goods from China less costly and more appealing to global consumers.  The US appealed to the G-20 on deaf ears as the Euro Zone, Australia, Canada, New Zealand and Japan have been trying to devalue their currencies.   The US Federal Budget Deficit came in at $36.9 billion while a year ago it was $106.5 billion.  The taxes were up while the spending was down.   The sequestration and higher revenue got rave revues by the IMF.  Last October, the US was close to suffering a default but managed to draw up a budget agreement temporarily.  They still need the long-term sustainable agreement drawn up that would enrich the nation beyond a potential deficit.  Treasuries increased after the Fed minutes this week as the market may have had tightening expectations dampened.  The increased time on the tightening may have boosted the Treasuries at the Indexes expense.  The increase may take place more likely mid-to-latter-2015.   The US Fed released the minutes of the March 18th – 19th Fed meeting Wednesday.    US Fed Chairperson Janet Yellen had regained the positive vibe as she said that the US has a “considerable slack” in the labor market allowing the accommodation to remain as back up for some time to come.  Her commentary prior had put a potential tightening on interest rates in perhaps as little as six months.  She was able to calm investors with a dovish tone.  Projections for continued growth in the US look extremely positive with little to drag it down at this time.   US Fed Chairperson Yellen keeps the accommodative stance as a floor for this market, by maintaining that the Fed may have further tools or at least implying that.  The International Monetary Fund (IMF) and the World Bank along with financial ministers and world bank governors are to meet April 11th thru the 13th to discuss economic issues and financial markets.   IMF Managing Director Christine Lagarde coined the word “Low-flation” as she asked for additional monetary easing in the Euro Zone and Japan.  The Euro Zone’s gauge of economic confidence gained to 102.4 in March while the previous reading was 101.2.   The US interest rate projections by analysts are from 4.25 % to possible 3 % to the end of 2016.   The European Central Bank met with an unchanged interest rate, yet they did discuss a potential stimulus.  The German IFO Business Conditions Index decreased in March to 110.7 while the previous reading had been 111.3.   The European Central Bank is contemplating a program of quantitative easing much like the US had to thwart a deflationary passage.  The Bank of Japan on the other hand may be introducing further stimulus with deflation concerns.   The IMF sees the world economy growth at about 3.6 %.  The IMF sees the Euro Zone with a 2.9 % GDP this year.  The Bank of England officials state that they will maintain the key interest rate at the lows until Employment decreases from 7.2 % to 7.0 %.  The IMF is projecting the US growth to 2.8 % this year and 3.0 % in 2015.    Russia and economic sanctions  may be discussed.   Russia is cited for the sanctions but they may target more than the giant economy as US companies have investments in Russia such as Boeing and General Electric.  The Euro Zone including Germany may also suffer as the sanctions are imposed on Russia to put a financial strangle hold on the country.    A snowball effect of conflict could ultimately result in the sanctions as Russia has been playing an integral part of negotiations with Iran on the nuclear program.  Sanctions on Iran had been previously placed to pressure the country into allowing the NATO inspectors to come into their nuclear facilities to monitor the use of uranium.  The uranium is said to be used at the highly developed level for medical purposes but it also becomes capable of being used to complete a nuclear bomb.  Israel is within reach to Iran to suffer any hostile action initially and therefore they have pressured the US to propose the sanctions.  Iran is now anxious to wind up the talks and agreements.  US President Obama now wants to prevent the Iranian Ambassador, Hamid Aboutalebi from entering the US as the chosen UN envoy.  He had been involved with terrorist activity in the past and the president feels him a threat to US safety.  In 1979, the takeover of the US embassy was credited to the ambassador as one of his espionage efforts.  He may be denied a US Visa to work at the UN.     US President Barack Obama has been under some pressure for perhaps not opposing the takeover of Crimea by Russia more, but his diplomacy is of the utmost importance in such matters.   Russian President Putin further taunts the US with support for Bashar al-Assad in Syria.  They have sent weaponry like the “vacuum bomb” which is a heat and pressure explosive device.  Iran and Russia are both with sanctions bartering goods and using oil to gain the products necessary for survival.  The global relationships are vital to maintain peace and harmony.  The nuclear disarmament of Iran and the role that Russian President Putin has is of vital importance to world peace.  Putin can use his close relationship to the Iran officials to maintain harmony and keep the talks open.   Russia is a huge trade relationship where globally, it would make a difference to other countries if the sanctions against Russia were to tighten.   On the Russian developments, Vladimir Putin announced that he is not intent on splitting up the Ukraine.   He is bent on increasing the region’s profitability with tourism and as an energy route.   For the people of Crimea, much will change. Ukraine people will need a Russian Visa to travel within the region.  The Russian leader is invoking some sanctions of his  own as the Ukraine purchases about a half of their natural gas from Russia.  OAO Gazprom (GAZP) is the primary Russian gas export firm that is owed at $2.2 billion by the Ukraine.  Russia feels it is within their right to revert to a prepay account with the Ukraine.  Gazprom recently increased their prices substantially to the Ukraine perhaps in the heat of the potential conflict regarding Crimea.  Global leaders are looking for a resolve perhaps even a possible reverse flow system from Eastern Europe.  April 17th,     global leaders meet in Geneva to look for solutions.     The vote was in favor of Crimea to secede and ask the Russian Federation for Membership.  Crimea had belonged to Russia back in the 1954 until Nikita Khrushchev had given the Black Sea region to the Ukraine.  Russian President Putin defends his right to send troops to the Ukraine on behalf of the Russian citizens residing there.  He actually stayed within the treaty limit of 25,000 troops initially, but it was reported that about 40,000 troops remain around the Ukraine border.   The Ukraine is seeking financial aid from the IMF of up to about $18 billion to help the country out of the debt.   The G-7 is to discuss the Ukraine situation in Washington.  The G-7 consists of the US, Japan, Germany, UK, Italy, France and Canada.     Global leaders still regard Russia’s action as grabbing a country for benefits perhaps derived from the resources of the region.   World leaders are intent on watching Putin to be sure his “annexing” stops at Crimea!   British Prime Minister David Cameron regarded this action as a breach of international law.  Sanctions may be imposed on Russia still yet regarding this action such as travel bans and financial sanctions.  About $5.5 billion of outflows have already transpired this year in Russia in light of the sanctions.   US sanctions have already stopped the Visa and MasterCard services at the Bank Rossiya in St. Petersburg.  Sanctions on parties in Putin’s inner circle have been targeted.  The sanctions have already had an impact on Russia as Fitch’s credit rating agency has cut the outlook to BBB negative.  Loans have been called in and gold reserves have fallen to $493.2 billion as of March 14th.   The G-8 said that they will suspend the G-8 Summit in Sochi this year.    The Organization for Economic Cooperation and Development has spoken of revoking Russia’s entrance into the organization.  Asset blockades, financial and trade sanctions have all been suggested.  Putin may pay about $3 billion ++ costs to annex Crimea.  The problem seems to be a history of violating international boundaries for the Russian President.  Putin retorts that the US and NATO have come close to the Russian borders.  For the moment, the market is taking Putin’s words as peaceful!  If or when sanctions are imposed by other countries, will the environment remain peaceful or could another cold war escalate?  For now, Putin seems to be concentrating on the completion the annexing of Crimea.   Russia and the US had fought on the same side during WWI and WWII yet tensions still run very deep.    Russian troops seized the Crimean port of Sevastopol raising their flag.   Russia’s take-over of Crimea will perhaps consist of pension adjustments up to the Russian pensions, raises, infrastructure upgrades such as quite possibly a bridge and a tunnel.  The EU may proceed to lighten imports of natural gas from Russia.   It is hopeful that the Russian President will be able to show that he is not interested in taking other regions and that his intent is peaceful.  It would be also hopeful that the sanctions would not constrict to the point of pressure to escalate any aggression.   The Euro Zone and the world would feel the pressure of the sanctions as many global workers are employed by Russian companies.   Russia and the US both have an accord on nuclear terrorism threats realizing that international cooperation is necessary to provide a stronger front.

Today’s Producer Price Index for March was 0.5 % while the previous reading had been -0.1 %.  The PPI excluding food and energy was 0.6 % while the previous reading was -0.2 %.  The PPI excluding food, energy and trade services was 0.3 % while the previous reading was 0.1 %.  The PPI Goods were 0.0 % while the previous reading was 0.4 %.  The PPI Services were 0.7 % while the previous reading was -0.3 %.  The Consumer Sentiment for April was 82.6 while the previous reading was 80.0.  The Initial Jobless Claims for the week of April 5th was down 32,000 to 300,000 while the previous reading had been 326,000.  The Continuing Claims was down 62,000.  Import Prices for March were  0.6 % while the previous reading had been 0.9 %.  The Export Prices were 0.8 % while the previous reading was 0.6 %.  The Bloomberg Consumer Comfort Index for April was -31.9 while the previous reading had been -30.0.  The Treasury Budget for March was -$36.9 billion while the previous reading was -$193.5 billion.  The Fed Balance Sheet of Total Assets was $7.7 billion while the previous reading had been $9.5 billion.  The Reserve Bank Credit was $6.9 billion while the previous reading was $4.7 billion.  The Money Supply for the week of March 31st    was -$37.0 billion while the previous reading had been $20.0 billion.  The MBA Purchase Applications Composite for the week of April 4th was -1.6 % while the previous reading was -1.2 %.  The Purchase Index was 3.0 % while the previous reading was 1.0 %.  The Refinance Index was -5.0 % while the previous reading was -3.0 %.  Wholesale Trade Inventories for February were 0.5 % while the previous reading was 0.6 %.  The Federal Open Market Committee minutes were read today from the March 18th and 19th meetings.  The  Fed expressed that policy will remain loose for years and the tapering is in measured steps supporting the stock indices.  A couple of Fed members see the Fed Funds Rate low as inflation remains below 2 %.  The NFIB Small Business Optimism Index for March was 93.4 showing increased confidence in the economy while the previous reading was 91.4.  The ICSC-Goldman Store Sales for the week of April 5th was 1.5 % while the previous reading was 3.6 %.  The Redbook Sales for the week of April 5th was 2.9 % while the previous reading was 2.3 %.  The JOLTS (the Labor Department’s Job Openings and Labor Turnover Survey for February was 4.173 million while the previous reading was 3.974 million.  The Gallup US Consumer Spending Measure for March was $87 unchanged.  The TD Ameritrade IMX for March was 5.87 while the previous reading was 5.74.  US Consumer Credit for February was $16.5 billion while the previous reading was $13.7 billion.  The Nonfarm Payrolls for March was 192,000 while the previous reading was 175,000.  Though better than February’s report, the forecast of 206,000 left some traders disappointed with the moderate number.  The Unemployment rate was left unchanged at 6.7 % while the forecasts were for 6.6 %.  The Average Hourly Earnings was 0.0 % while the previous reading had been 0.4 %.  The Average Workweek was 34.5 hours while the previous reading was 34.2 hours.  The Private Payrolls was 192,000 while the previous reading was 162,000.

This is where the long-term safe-haven qualities must be viewed to determine the true value of Gold.  It is not the type of commodity that is typically day-traded.  Its true purpose is as a currency when others are devalued.  It is a hedge against inflation.  It is a backup plan for a world in conflict or crisis. It is the type of investment that one may not need all the time but when an event takes place, it is worth its weight in Gold.     
The Gold (June) contract is in buy mode if it stays above $1282.40.  It could retrace to $1186.70 or back up to $1392.20 depending on the Ukraine situation and the economy.  A key consolidation area may be $1318.90.  The range may be $1307.00 to $1350.00 for now.  Should Russian President Putin become ambitious to acquire additional annexing of the neighboring regions, nuclear talks begin to fail, the economic reports detect a contraction of growth in the US and/or a slowdown in China all could spur positive price action in the Gold market back to the old highs or above.  For now, the Gold carries a negative positioning remaining under pressure.  Anything can happen.  The options may give a trader the right to control a futures position at a specific price or to simply profit/loss on the premium itself.  It is suggested to consult your broker without delving into options if you are unfamiliar with them. 

  Gold Chart 

 

 


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Friday, April 4, 2014

Weekly Gold

The Gold market may just break out of the bearish stance temporarily.   The Employment report today just gave the Gold a bit of a boost as the US Dollar faded in the session.  The interpretation of the data seems to reflect the market sentiment more than numbers.  It signaled disappointment as the expectations called for 206,000 while the market delivered 192,000.  Though the previous reading for February had been 175,000 which confirms a gradual recovery.    Gold is a wonderful safe-haven currency that may hedge against inflation and/or currency devaluation.  Today, there may have been more of a short-covering bounce than a bullish sentiment.  While it does have a distinct upturn, it may be a short-term bounce where a range may hold the metal for some time.   The Gold and the US Dollar typically have that correlation where one may go up pressuring the other to go down.  It is also quite noticeable that the equity markets have also developed that relationship with Gold where the allocations move from equities to Gold during times of economic weakness and/or uncertainty.  The recent debut by US Fed Chairperson Janet Yellen had released the potential time of the tightening to perhaps six months, but this week she countered the statement with an accomodative  dovish tone.  Central banks are still net buyers of the Gold with holdings increasing 6.3 million ounces last year.  The banks are projected to buy 5.4 million ounces in 2014.  The industrial demand for Gold has reached about 92.0 million ounces in 2013.  Investment demand had decreased to 30.9 million ounces in 2013.  The Central Bank of Iraq had acquired 36 metric tons of Gold in March.  Central banks purchased 544 tons of Gold in 2012 without the data or excluding China while in 2013 went to 369 tons.  China rarely releases data to get a view of their holdings.  Germany is currently moving Gold from New York to Frankfort in an attempt to increase their reserves while their holdings are the second largest to the US at 3,387.1 metric tons.  Mexico had increased their holdings by 78.5 tons of Gold in March.  Kazakhstan February reserves at 4.73 million troy ounces.   The US reserves 8,133.5 tons.  Holdings in the SPDR Gold Trust increased 0.6 % to 821.47 metric tons.   Supplies of Gold above ground are estimated to be about 177,200 tons according to the World Gold Council.  Gold remains as one of the most liquid assets that has rallied in the face of the worst calamities in our history books. 

The Employment Report showed 192,000 new jobs created in March when the last report was 175,000 but the expectations were for 206,000.  Of course the temporary workers increased to 28,500.  Health care added 34,000 jobs.  Construction added 19,000 new workers and retail added 21,300 jobs.    All in all, it was the gradual growth that we have seen during the recovery.  Last week, US Fed Chairperson Janet Yellen had regained the positive vibe as she said that the US has a “considerable slack” in the labor market allowing the accommodation to remain as back up for some time to come.  Her commentary prior had put a potential tightening on interest rates in perhaps as little as six months.  She was able to calm investors with a dovish tone.  Projections for continued growth in the US look extremely positive with little to drag it down at this time.   As the data comes in, traders will wonder about the “mini stimulus” to be launched by China.  The International Monetary Fund (IMF)and the World Bank along with financial ministers and world bank governors are to meet April 11th thru the 13th to discuss  economic issues and financial markets.   IMF Managing Director Christine Lagarde coined the word “Low-flation” as she asked for additional monetary easing in the Euro Zone and Japan.  The Euro Zone’s gauge of economic confidence gained to 102.4 in March while the previous reading was 101.2.   The US interest rate projections by analysts are from 4.25 % to possible 3 % to the end of 2016.   The European Central Bank met  with an unchanged interest rate, yet they did discuss a potential stimulus.  The German IFO Business Conditions Index decreased in March to 110.7 while the previous reading had been 111.3.   The European Central Bank is contemplating a program of quantitative easing much like the US had to thwart a deflationary passage.  The Bank of Japan on the other hand and the European Central Bank may be introducing further stimulus as the US is withdrawing theirs.   Russia and economic sanctions will probably not be discussed.   Russia is cited for the sanctions but they may target more than the giant economy as US companies have investments in Russia such as Boeing and General Electric.  The Euro Zone including Germany may also suffer as the sanctions are imposed on Russia to put a financial strangle hold on the country.    A snowball effect of conflict could ultimately result in the sanctions as Russia has been playing an integral part of negotiations with Iran on the nuclear program.  Sanctions on Iran had been previously placed to pressure the country into allowing the NATO inspectors to come into their nuclear facilities to monitor the use of uranium.  The uranium is said to be used at the highly developed level for medical purposes but it also becomes capable of being used to complete a nuclear bomb.  Israel is within reach to Iran to suffer any hostile action initially and therefore they have pressured the US to propose the sanctions.  US President Barack Obama has been under some pressure for perhaps not opposing the takeover of Crimea by Russia more, but his diplomacy is of the utmost importance in such matters.   Russian President Putin further taunts the US with support for Bashar al-Assad in Syria.  They have sent weaponry like the “vacuum bomb” which is a heat and pressure explosive device.  Iran and Russia are both with sanctions bartering goods and using oil to gain the products necessary to survival.  The global relationships are vital to maintain peace and harmony.  The nuclear disarmament of Iran and the role that Russian President Putin has is of vital importance to world peace.  Putin can use his close relationship to the Iran officials to maintain harmony and keep the talks open.   Russia is a huge trade relationship where globally, it would make a difference to other countries if the sanctions against Russia were to tighten.   On the Russian developments, Vladimir Putin announced that he is not intent on splitting up the Ukraine.   He is bent on increasing the region’s profitability with tourism and as an energy route.   For the people of Crimea, much will change. Ukraine people will need a Russian Visa to travel within the region.  The Russian leader is invoking some sanctions of his  own as the Ukraine purchases about a half of their natural gas from Russia.    The vote was in favor of Crimea to secede and ask the Russian Federation for Membership.  Crimea had belonged to Russia back in the 1954 until Nikita Khrushchev had given the Black Sea region to the Ukraine.  Russian President Putin defends his right to send troops to the Ukraine on behalf of the Russian citizens residing there.  He actually stayed within the treaty limit of 25,000 troops initially, but it was reported that about 40,000 troops remain around the Ukraine border. Global leaders still regard Russia’s action as grabbing a country for benefits perhaps derived from the resources of the region.   World leaders are intent on watching Putin to be sure his “annexing” stops at Crimea!  British Prime Minister David Cameron regarded this action as a breach of international law.  Sanctions may be imposed on Russia still yet regarding this action such as travel bans and financial sanctions.  About $5.5 billion of outflows have already transpired this year in Russia in light of the sanctions.   US sanctions have already stopped the Visa and MasterCard services at the Bank Rossiya in St. Petersburg.  Sanctions on parties in Putin’s inner circle have been targeted.  The sanctions have already had an impact on Russia as Fitch’s credit rating agency has cut the outlook to BBB negative.  Loans have been called in and gold reserves have fallen to $493.2 billion as of March 14th.   The G-8 said that they will suspend the G-8 Summit in Sochi this year.  The Organization for Economic Cooperation and Development has spoken of revoking Russia’s entrance into the organization.  Asset blockades, financial and trade sanctions have all been suggested.  Putin may pay about $3 billion ++ costs to annex Crimea.  The problem seems to be a history of violating international boundaries for the Russian President.  Putin retorts that the US and NATO have come close to the Russian borders.  For the moment, the market is taking Putin’s words as peaceful!  If or when sanctions are imposed by other countries, will the environment remain peaceful or could another cold war escalate?  For now, Putin seems to be concentrating on the completion the annexing of Crimea.   Russia and the US had fought on the same side during WWI and WWII yet tensions still run very deep.  Russian troops seized the Crimean port of Sevastopol raising their flag.   Russia’s take-over of Crimea will perhaps consist of pension adjustments up to the Russian pensions, raises, infrastructure upgrades such as quite possibly a bridge and a tunnel.  The EU may proceed to lighten imports of natural gas from Russia.   It is hopeful that the Russian President will be able to show that he is not interested in taking other regions and that his intent is peaceful.  It would be also hopeful that the sanctions would not constrict to the point of pressure to escalate any aggression.   The Euro Zone and the world would feel the pressure of the sanctions as many global workers are employed by Russian companies.   Russia and the US both have an accord on nuclear terrorism threats realizing that international cooperation is necessary to provide a stronger front.

Today’s Nonfarm Payrolls for March was 192,000 while the previous reading was 175,000. Though better than February’s report, the forecast of 206,000 left some traders disappointed with the moderate number.  The Unemployment rate was left unchanged at 6.7 % while the forecasts were for 6.6 %. The Average Hourly Earnings was 0.0 % while the previous reading had been 0.4 %.  The Average Workweek was 34.5 hours while the previous reading was 34.2 hours.  The Private Payrolls was 192,000 while the previous reading was 162,000.  The US Initial Jobless Claims for the week of March  29th was up 16,000 to 326,000 while the previous reading was 311,000.  Continuing Claims were up 22,000 to 2.836 million.  The Challenger Job-Cut Report for March was 34,399 announced layoffs while the previous reading was 41,835.  The Gallup US Payroll to Population level for March was 42.7 while the previous reading was 43.1. International Trade Balance for February was -$42.3 billion while the previous reading was -$39.1 billion.  The PMI Services Index for March was 55.3 while the previous reading was 53.3.  The ISM Non-Manufacturing Composite Index for March was 53.1 while the previous reading was 51.6.  The Bloomberg Consumer Comfort Index for March was -30.0 while the previous reading was -31.5.  The Factory Orders for February were 1.6 % while the previous reading was -0.7 %.  The MBA Purchase Applications Composite for the week of March 28th were -1.2 % while the previous reading was -3.5 %.  The Purchase Index was 1.0 % while the previous reading was 3.0 %. The Refinance Index was -3.0 % while the previous reading was -8.0 %.  The ADP Employment Report of Private Payrolls for March was 191,000 while the previous reading was 139,000. The Gallup US Job Creation Index for March  was 23 while the previous reading was 21.  The PMI Manufacturing Index for March was 55.5 while the previous reading was 57.1.   ISM Manufacturing Index for March was 53.7 while the previous reading was 53.2.  Construction Spending for February was 0.1 % while the previous reading was unchanged.  The ICSC-Goldman Store Sales for the week of March 29th was 3.6 % while the previous reading was -1.5 %.  The Redbook Store Sales was 2.3 % while the previous reading was 3.1 %.  The Chicago PMI Business Barometer Index for March was 55.9 while the previous reading was 59.8.  The Dallas Fed Manufacturing Survey for March Business Activity Index was 4.9 while the previous reading was 0.3.  The Production Index was 17.1 while the previous reading was 10.8.          

This is where the long-term safe-haven qualities must be viewed to determine the true value of Gold.  It is not the type of commodity that is typically day-traded.  Its true purpose is as a currency when others are devalued.  It is a hedge against inflation.  It is a backup plan for a world in conflict or crisis. It is the type of investment that one may not need all the time but when an event takes place, it is worth its weight in Gold.     
The Gold (June) contract is in sell mode if it stays below $1310.50.  It could retrace to $1186.70 or back up to $1392.20 depending on the Ukraine situation and the economy.  A key consolidation area may be $1310.50.  The range may be $1295.50 to $1350.00 for now.  Should Russian President Putin become ambitious to acquire additional annexing of the neighboring regions, nuclear talks begin to fail, the economic reports detect a contraction of growth in the US and/or a slowdown in China all could spur positive price action in the Gold market back to the old highs or above.  For now, the Gold carries a negative positioning remaining under pressure.  Anything can happen.  The options may give a trader the right to control a futures position at a specific price or to simply profit/loss on the premium itself.  It is suggested to consult your broker without delving into options if you are unfamiliar with them. 

  Gold Chart 

 

 


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Tuesday, April 1, 2014

Customers may be spared from keeping minimum balance in savings accounts Read more at: http://economictimes.indiatimes.com/articleshow/33064811.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

Bank customers may no longer have to maintain a minimum balance in their savings account as the Reserve Bank of India has directed banks to do away with the practice of levying penalty on account holders who don't do so. While this spells good news for account holders, some bankers said this would increase their costs and they might start charging for some of the services they were offering free. 

"I think what they are saying is, if you don't charge on maintaining minimum balance then  .. 


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Friday, March 28, 2014

Weekly Gold

June Gold settles 1294.8, down $39.90 for the week ended Friday March 28th

Gold futures remained below $1,300 an ounce on Friday, unable to trim this week's significant losses despite a slightly weaker U.S. dollar. June gold fell 50 cents to settle at $1,294.30 an ounce on the Comex division of the New York Mercantile Exchange. The front-month contract was down more than 3 percent this week. The precious metal lost its luster last week when Federal Reserve Chair Janet Yellen suggested that hikes may be in the cards about a year from now. Today's encouraging U.S. consumer spending data may give the Fed's more hawkish members further reason to advocate for tightening monetary policy sooner than expected. New government figures showed consumer spending rose 0.3 percent in February, suggesting that the mid-winter slowdown was weather-related and temporary.

Looking ahead to economic news next week, analysts said they'll keep an eye out for the European Central Bank meeting on Thursday and Friday's March nonfarm payrolls report from the U.S. Labor Department. Currency analysts said there's been some discussion in the markets that the ECB will act in some dovish way, given that ECB President Mario Draghi has expressed concern that the recent strength in the euro is becoming a risk to growth and the inflation targets. Worries about deflation cropping up in the European Union increased after weak consumer price index readings in Spain, although German CPI data came in about as expected. Spanish retail sales were soft and France reported a fall in consumer spending. Friday the U.S. Labor Department is slated to release its March nonfarm payrolls report, which will keep gold-market traders on alert. Pre report trade estimates are looking for a gain of 195,000 jobs with the unemployment rate falling to 6.6 percent. Technicals for next week come in as follows for June Gold and May Silver. For June Gold, support sits at 1275.4 and below here at 1256.0. Support sits up at 1324.9 and above there at 1355.0. For May Silver support is down first at 19.47, and below there at 19.15. Resistance is up at 20.21 and above there at 21.05.


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Tuesday, March 25, 2014

SIP vs Lumpsum... Which One Works Better in Mutual Fund Investment?

SIP is one of the most advocated way of investing in mutual funds. Without doubt SIP is a good tool for systematically accumulating a corpus by investing with market-linked investments for future goals. In this article we look at why or under what circumstances is SIP is a better way to invest. We will be illustrating our thoughts with numbers.

Firstly what is SIP?

SIP stands for Systematic Investment Plan, a mode of investing in mutual funds that allows one to invest fixed amounts in a specific mutual fund scheme for regular periods. It makes regular investment convenient with the auto debit facility, and affordable with a low minimum investment requirement. SIP doesn’t incur any additional charges.

However if we were to compare both lump sum and SIP mode of investments, one should understand that the performance of the particular investment will depend on the market conditions at that time and if it is invested for long term or short term in case of lump sum and cost averaging in case of SIP. Cost averaging results in an investment being purchased at an average cost spread over a period of time instead of one cost on a single day, which could be higher than or lower than the average.

Here is a demonstration of how these two factors could affect your investments –

Disclaimer: Above chart is for illustrative purpose only.
SIP does not assure a profit or guarantee protection against loss in a declining market and should not be construed as a promise, guarantee on or a forecast of any minimum returns.

Thus investing in SIP generally one would get fewer units when price is high and more units when price is low.
However the table above also makes it obvious that the game would favour lump sum investment had it been made when the unit price was lowest (generally when the equity market is down). In such a case the investments would look like this, all else remaining the same.

Disclaimer: Above chart is for illustrative purpose only.
SIP does not assure a profit or guarantee protection against loss in a declining market and should not be construed as a promise, guarantee on or a forecast of any minimum returns.

Lump sum has the potential to outshine SIP. However one should remember that SIP offers an averaged out return thus generally insulates against worst returns.

Disclaimer: Above chart is for illustrative purpose only.
SIP does not assure a profit or guarantee protection against loss in a declining market and should not be construed as a promise, guarantee on or a forecast of any minimum returns.

As the numbers above show, SIP works better than lump sum investment in volatile periods. Since no one can predict market movements accurately it is extremely risky to make bets on what time to buy units or sell them.

One brownie point for SIP

From a practical point of view SIP is the preferred route of mutual fund investments as investing through SIP’s inculcates the discipline of saving & investing. It is best to align the frequency of investments with that of earning income. If you are salaried employee, you could go formonthly SIP to regularize your savings. Most of our bills have a monthly cycle so viewing SIP as a monthly ‘expense’ helps in the investing habit formation.

So what should it be? Lump sum or SIP?

In our view, as stated above, SIP helps you inculcate the habit of investing, and as salaries come in monthly so should investments be. However do not rule lump sum investing out, in case you get your annual bonus or an inheritance it is best to invest that money wisely in a suitable mutual fund. Thus to conclude, for investing in mutual funds we believe one could opt for SIP mode, unless you have a lump sum amount to invest for long term (more than 5 – 7 yrs). However we strongly suggest you to consult with your financial advisor before proceeding with any investment decision.


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Saturday, March 22, 2014

weekly gold

The potential conflict in the Ukraine has stabilized as Russian President Putin has not advanced further on the Ukraine territories.  The debut by Fed Chairperson Janet Yellen had put tightening on the calendar which is also negative for Gold.  The European Union (EU) is considering modifying the 400 ton a year selling boundry on the Gold which may unleash more massive selling.  China may experience a increase in economic expansion.  The fundamentals in Gold point to negative action in the Gold market, yet one cannot ignore the technicals.  The April Gold chart has an extremely Gold formation suggesting we could see an advance on the Gold next week.  This is in contrast to most analysts right now.   The range may still hold between $1320.00 to $1393.00.  The net longs according to the CFTC COT report was 123,007 contracts as of March 11th.  According to the World Gold Council, in 2013 the Gold demand increased 21 % to 3,756 tons. Global demand for jewelry was up 17 % to 2,209 tons.  Demand in the technology sector was 405 tons.  The outflows from ETF's was 881 tons.  Chinese and Indian Gold bar purchases was up 38 %.  The need for Gold in India has outstrip its import duties. Smuggling has increased due to the approximate 11 % import tax.  India began imposing the import taxes in an attempt to control the deficit along with increased inflation and their devalued rupee.  The physical metal is still sought after due to the safe-haven aspects and as a hedge against inflation.  

 This week Yellen’s potential tightening in as little as six months may have been misspoken but cannot be taken back.  After all, this was a stimulus fed market and we have heard many times that tapering is not tightening.   Of course, the market can shrug this off.  The sentiment of this market seems to be no news is good news, but unexpected news can be startling.  Factory orders and car sales may increase, but the energy prices may help to determine how much the cost of production may be.  President Obama had released some of the Crude Oil reserves to begin the sanctions on Russia as they produce the energy products.   OPEC came back with a reduction in their production.  Then Iraq advanced their production, so that may be key in determining the success of the recovery.  The US may also boost their shale production to offset any energy coming from Russia.  The market had been supported by strong housing data and Russian President Putin calming the fears of the investors by clarifying his intent for the Ukraine.   The Housing Permits for February were 1.018 million while the previous reading was 0.937 million an increase of 7.7 %.  This is the bright spot for increased employment in the housing sector.  Vladimir Putin announced that he is not intent on splitting up the Ukraine.  The vote of Sunday was in favor of Crimea to secede and ask the Russian Federation for Membership.  Crimea had belonged to Russia back in the 1954 until Nikita Khrushchev had given the Black Sea region to the Ukraine.  Russian President Putin defends his right to send troops to the Ukraine on behalf of the Russian citizens residing there.  He actually stayed within the treaty limit of 25,000 troops.   Global leaders still regard Russia’s action as grabbing a country for benefits perhaps derived from the resources of the region.   World leaders are intent on watching Putin to be sure his “annexing’ stops at Crimea!   British Prime Minister David Cameron regarded this action as a breach of international law.  Sanctions may be imposed on Russia still yet regarding this action.  US sanctions have already stopped the Visa and MasterCard services at the Bank Rossiya in St. Petersburg.   Sanctions on parties in Putin’s inner circle have been targeted.  The sanctions have already had an impact on Russia as Fitch’s credit rating agency has cut the outlook to BBB negative along with Standard & Poors.  Loans have been called in and gold reserves have fallen to $493.2 billion as of March 14th.   The G-8 said that they will suspend the G-8 Summit in Sochi this year.    The Organization for Economic Cooperation and Development has spoken of revoking Russia’s entrance into the organization.  Asset blockades, financial and trade sanctions have all been suggested.  Putin may pay about $3 billion ++ costs to annex Crimea.  The problem seems to be a history of violating international boundaries for the Russian President.  Putin retorts that the US and NATO have come close to the Russian borders.  For the moment, the market is taking Putin’s words as peaceful!  If or when sanctions are imposed by other countries, will the environment remain peaceful or could another cold war escalate?  For now, Putin seems to be concentrating on the completion the annexing of Crimea.   Russia and the US had fought on the same side during WWI and WWII yet tensions still run very deep.    Russian troops seized the Crimean port of Sevastopol raising their flag.   Russia’s take-over of Crimea will perhaps consist of pension adjustments up to the Russian pensions, raises, infrastructure upgrades such as quite possibly a bridge and a tunnel.

The Atlanta Fed Business Inflation Expectations for March was 1.8 % while the previous reading was 2.0 %.  The Initial Jobless Claims for the week of March 15th were up 5,000 to 320,000 while the previous reading had been 315,000.  The continuing claims were up 41,000 to 2.889 million.   The Bloomberg Consumer Comfort Index for March were -29.0 while the previous reading had been -27.6.  The Philadelphia Fed Survey General Business Conditions for March was 9.0 while the previous reading was -6.3.  The Existing Home Sales was -0.4 % to  4.600 million while the previous reading had been 4.62 million.  The Leading Indicators for February were 0.5 % while the previous reading was 0.3 %.  The Fed Balance Sheet of Total Assets for the week of March 19th was $40.7 billion while the previous reading was $9.6 billion.  The Reserve Bank Credit was $39.1 billion while the previous reading had been $11.2 billion.  The Money Supply for the week of March 10th was $23.7 billion while the previous reading was -$13.9 billion.  The MBA Purchase Applications Composite Index for the week of March 15th was -1.2 % while the previous reading was -2.1 %.  The Purchase Index was -1.0 % unchanged from  the previous reading.  The Refinance Index was -1.0 % while the previous reading was -3.0 %.  The Current Account was -$81.1 billion while the previous reading was -$94.8 billion.  The Federal Open Market Committee Announcement kept the Fed Funds Rate at 0 to 0.25 % unchanged.   The Feds plans to taper remains intact where April will have another $10 billion reduction on the monthly bond purchases known as quantitative easing.   The Fed also gave the country a tightening condition where perhaps 2015 could allow for an interest rate hike.  he ICSC-Goldman Store Sales for the week of March 15th was 0.7 % while the previous reading was 1.3 %.  The Redbook Sales was at 2.8 % while the previous reading was 2.5 %.  Housing Starts for February were 0.907 million while the previous reading was 0.880 million.  The Housing Permits for February were 1.018 million while the previous reading was 0.937 million.  The Consumer Price Index for February was 0.1 % unchanged.  The CPI excluding food and energy was 0.1  % unchanged.  Treasury International Capital Foreign Demand for Long-Term US Securities for January was $7.3 billion while the previous reading was -$45.9 billion.  The Empire State Manufacturing Survey of General Business Conditions Index for March was at 5.61 while the previous reading had been 4.48.  Industrial Production for February was 0.6 % while the previous reading was -0.3 %.  The Capacity Utilization Rate was 78.8 % while the previous reading was 78.5 %.  The Manufacturing portion was 0.8 % while the previous reading was -0.8 %.  The Housing Market Index for March was 47 while the previous reading was 46.  The last Nonfarm Payrolls for February was a whopping 175,000 while the previous reading was 113,000.  The Unemployment Rate was increased to 6.7 % while the previous reading was 6.6 %.  The Average Hourly Earnings were 0.4 % while the previous reading was 0.2 %.  The Average Workweek was 34.2 hours while the previous reading was 34.4 hours.  The Private Payrolls was 162,000 while the previous reading was 142,000.  Next week, we have data on the Gross Domestic Product, durable goods and housing due out! 

The Gold (April) contract is in sell mode if it stays below $1388.50.  It could retrace to $1320.00 or back up to $1388.50 depending on the Ukraine situation and the economy.   Anything can happen.  The options may give a trader the right to control a futures position at a specific price or to simply profit/loss on the premium itself.  It is suggested to consult your broker without delving into options if you are unfamiliar with them. 

  Gold Chart 


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Saturday, March 15, 2014

foecast of currency & gold


US Dollar Looks to Fear, FOMC to Set Off Lasting Bull Trend

What will move the US dollar in the week ahead? We are awash in major fundamental catalysts – the type that can generate meaningful trends and not just short-lived bouts of volatility.

ECB's Draghi Warns on Euro Strength - Will it Keep Rising?

The European Central Bank is losing credibility as it flip-flops a week after its rate decision: will or will not the Euro's elevated exchange rate prompt action? Not yet, not when the EURUSD is only trading near $1.4000.

Japanese Yen Surge May Offer Attractive Selling Opportunity

The Japanese Yen rallied sharply versus the US Dollar and other major counterparts as the highly-correlated Nikkei 225 posted its worst weekly performance in 9 months.

Gold on 6 Week Streak- $1400 within Striking Distance Ahead of FOMC

Gold rallied for a sixth consecutive week with the precious metal advancing 2.8% to trade at $1378 ahead of the New York close on Friday.

Australian Dollar Eyeing FOMC Outcome, Geopolitical Risks

The Australian Dollar is likely to be preoccupied with macro-level forces in the week ahead as the FOMCpolicy meeting and geopolitical factors take the spotlight.

Forex_Weekly_Trading_Forecasts_Volatility_to_Prevail_Amid_FOMC_Decision_Geopolitical_Tension_body_Picture_5.png, Forex Weekly Trading Forecasts: Volatility to Prevail Amid FOMC Decision, Geopolitical Tension


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